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August 13, 2007

Railway losses


August 13, 2007

The annual operating loss of Pakistan Railways has increased by an astonishing 13 times in just a single year. So much for the PR’s newly-launched e-ticketing scheme, because at this rate it may well become financially unviable to operate train services in the country. The organisation’s loss for 200-06 was Rs1.12 billion in 2005-06 and soared to Rs14.47 billion for the 2006-07. Federal Minister for Railways Sheikh Rashid Ahmad had a ready explanation for this when the spectacular shortfall was revealed in the Senate on Friday. In a written reply to a question from a member of the upper house, the minister gave details as to why the losses jumped from Rs1 billion to Rs14 billion to billion during the period of just one year. The reasons he has given range from the Rs1.5-billion expenditure on the rebuilding of a bridge between Hyderabad and Kotri (which kept passenger and freight trains traffic suspended for a whole month), to the repayment of a Rs3 billion overdraft to the State Bank. Part of the loss was the more than Rs1.2 billion spent on the 15 per cent increase in staff salaries and the rise in retired employees’ pensions. Not a word, though, on how much Pakistan Railways’ notorious inefficiency and tardiness cost the organisation during the year in question. For instance, trains continue to be late, sometimes by hours – and we’re not talking of the butt-of-jokes “passenger trains” – and that in itself translates into greater operational costs. Nor did he say how much the railways lost under the straightforward heads of ‘over-expenditure’ and ‘corruption’. Why the Rs3-billion overdraft had become necessary, in the first place, is something the minister omitted in his statement.

For an organisation that happens to be one of the country’s largest land-owners and also has the highest number of government employees, PR has the potential to rid itself of its financial woes but this will happen only if its senior management gets

its priorities right. There is no need for exorbitant and fanciful projects like the minister’s much vaunted so-called “bullet train” between Lahore and Islamabad/Rawalpindi. The PR has to get back to the basics. It should ensure that its trains are comfortable and that they are on time. It also needs to improve the quality of its ticketing services (the e-ticketing facility will help only some people because not everyone has access to the Internet) and reduce corruption in its ranks.

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